Bitcoin hit $81,000 this week. Retail traders who bought at $68,000 are now telling their families about their investment acumen. The same traders who panic-sold at $52,000 three months ago have apparently discovered principles.
The headlines credit renewed inflows into spot bitcoin ETFs. Retail doesn't buy ETFs. Retail buys actual bitcoin at 2am on their phones after watching a YouTube video titled "Why Bitcoin Will Hit $500K by Tuesday." The institutions are buying ETFs. The institutions have risk models and compliance departments. Retail has a Robinhood account and a dream.
Improving risk appetite is the other reason cited. Risk appetite is Wall Street's way of saying people are buying shit again. When bitcoin drops 40%, risk appetite has soured. When it goes up 30%, risk appetite has improved. The asset does exactly what it always does. The financial media writes two different articles about it.
Chart readers will note that $81,000 is precisely where bitcoin topped out before dropping to $76,000, then $71,000, then bouncing back up. Technical analysts call this resistance. I call it a number. Bitcoin crossed it briefly, then fell back below it, which means absolutely nothing except that it moved.
The crypto rally is gathering pace. Pace implies direction. Pace implies inevitability. Bitcoin could be at $91,000 next month or $61,000. The rally will either continue gathering pace or it will lose momentum, at which point the headlines will explain why that was obvious all along.
Somewhere right now a man is texting his ex-girlfriend a screenshot of his Coinbase account.
Photo by Kanchanara on Unsplash
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